New Distribution Option in the 401(k) Plan for Inactive Participants

A new distribution option is now available for inactive participants in the State Farm 401(k) Savings Plan.  It’s called the “Partial Distribution by Fund” withdrawal option, which allows eligible participants who have investments in more than one fund to select the investment fund from which a distribution is made.  This option offers participants the flexibility to request a withdrawal from a specified fund versus using the standard pro-rata investment fund depletion order.

A letter was mailed to all inactive participants in the 401(k) Savings Plan on July 14, 2009 with details about this option.

Who’s Eligible?
This option is only available to termed inactive participants, which includes retirees, terminated employees, beneficiaries, and qualified domestic relation order alternate payees.

What’s the Effective Date
Inactive participants may request a “Partial Distribution by Fund” on or after July 24, 2009.

How to request a “Partial Distribution by Fund”
Inactive participants may request a “Partial Distribution by Fund” by calling the State Farm 401(k) Plan Service Center toll free at 1-866-935-4015 between 8 a.m. and 4 p.m., Central Time, Monday through Friday.  However, before making the decision to request a “Partial Distribution by Fund,” inactive participants are encouraged to discuss this option with a financial or tax advisor.